Srinivasa Engineering Constructions Company Vs ITO (Andhra Pradesh High Court)
The writ petition challenged the action of the income tax authorities in initiating recovery proceedings for Assessment Years 2006-07 and 2011-12 while the petitioner’s statutory appeal remained pending. The petitioner, a construction and contract works firm, stated that its business operations had been discontinued from 2011 and that no return was filed for Assessment Year 2011-12. Following a notice issued under Section 148 of the Income Tax Act, 1961, the petitioner filed its return on 22.10.2018 disputing the reopening of the assessment. The Assessing Officer thereafter completed the assessment on 20.12.2018 under Section 143(3) read with Section 147.
Aggrieved by the assessment order, the petitioner filed a statutory appeal in Form-35 on 23.01.2019 and also submitted written arguments before the appellate authority. The Principal Commissioner of Income Tax granted stay of recovery until 30.06.2022 or till disposal of the appeal, whichever was earlier, and the stay was subsequently extended up to 31.03.2023. The petitioner also filed a further stay application before the appellate authority.
The petitioner contended that despite the appeal remaining pending, the first respondent issued a recovery notice dated 29.06.2026 demanding payment of outstanding tax and also issued notices to the firm’s partners. It was argued that coercive recovery during the pendency of the appeal would defeat the purpose of the statutory remedy and cause serious prejudice.
